The Companies (Winding Up) Rules, 2020 has reduced the burden of winding up on NCLT by shifting the power to Central Government in specified cases. Examine.

The Companies (Winding Up) Rules, 2020 allows the following companies to wind up their business by making an application to Central Government without approaching NCLT. Companies accepting deposit and having total outstanding deposits upto ₹25 Lacs. Companies having total outstanding loan including secured loan upto ₹50 Lacs. Companies having total turnover upto ₹50 Crores. Companies with Paid up share capital upto ₹ 1 Crore. Above companies are allowed to approach Central Government for summary liquidation only if they have book value of assets upto ₹1 crore. The provisions of the rules relating to filing and audit of the Company Liquidator's accounts and its procedure as well as disposing of assets shall be applicable to above class of companies with the Central Government instead of NCLT. Thus, the winding up rules has reduced the burden of winding up on NCLT by shifting the power to Central Government in specified cases, which will help in shortening the winding up timelines drastically.